What Is Forex And How Can It Make You Money?

Everyone has heard of people getting rich from Forex, but what exactly is Forex? More importantly, how can you get rich from it like so many others? Let's start with what Forex is. The Forex market (short for Foreign Currency Exchange) is a worldwide market where currencies are bought and sold. It is the buying and selling of one country's currency against another country's. This means that when you buy a currency pair, you are really buying one currency and selling another currency. For example, if you buy a few lots on EUR/USD, you would be buying the Euro and selling the US Dollar. So you would hope that the Euro value increases at a faster pace than the Dollar. This is how you make money!
The major currencies that are traded in Forex are the US Dollar (USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Canadian Dollar (CAD), Australian Dollar (AUD), and the Swiss Franc (CHF). Of these currencies, certain crosses of currencies are traded much more than others. The most heavily traded currency pairs are USD/JPY, EUR/USD, USD/CHF, and GBP/USD. These four are the most heavily traded in the currency markets. Notice that USD is a part of all of these pairs.
Unlike the stock market, Forex markets are not on a centralized exchange. This means that the market structure does not consist of having all orders routed to one central exchange. There is no one location where currencies are being traded. Instead, they are traded at the different brokers themselves. Because of this, currencies can have a different price quoted from broker to broker. The prices are not usually drastically different, but different nonetheless.